Monday, May 14, 2012

Big wind energy starting to blow south of the border

Mexico, the world's 14th largest economy, ranked only 24th on the list of  installed wind-energy capacity last year. But thanks in part to one of the earth's most impressive natural wind tunnels--and supportive government policies--the country is expected to surge into the #20 spot by the close of 2012.

"Most of the increase will come from giant wind farms along the Isthmus of Tehuantepec, the narrowest point between the Pacific Ocean and the Gulf of Mexico," writes David Alire Garcia for Reuters.  There, he says, "sudden gusts of wind can rip roofs off buildings and knock over tractor trailers."

The isthmus is the narrowest point between the Pacific Ocean and the Gulf of Mexico. The difference in temperature between the Gulf of Mexico and the Pacific Ocean in the southern state of Oaxaca creates one of the planet's strongest wind tunnels as gusts tear through gaps in the Sierra Madre mountains.

 "When the wind blows hard here, buses fall over and entire trees are uprooted," said shopkeeper Miriam Luis in La Ventosa, the area around which 18 of Mexico's 27 wind plants now operate.

Foreign companies helping Mexico make environmental and energy news

Spanish company Acciona says its $600 million project there alone will be enough to power 700,000 Mexican homes, generating 306 MW of energy with 204 turbines. That investment will be followed later this year by an even bigger wind farm owned by the Macquarie Group's Mexico hedge fund, in partnership with Mitsubishi Corp and PGGM, a leading Dutch pension fund.

At the other end of the country, Mexico will begin its first-ever wind power exports next year to San Diego, California from a giant farm in the Baja California peninsula.

By turning to wind, Garcia reports, Mexico aims to reduce its dependence on fossil fuels that now power some 80 percent of electricity.

Government incentives also play a role. 

Garcia reports that:

"The government is giving incentives to companies to use wind energy and Cemex, one of the world's largest cement makers, bread maker Grupo Bimbo, the Mexican arm of Wal-Mart, and mining company Penoles are among the corporations signing up.

"The Federal Electricity Commission, or CFC, offers companies a discount on electricity prices if they sign long-term power contracts with wind farms. As a result, the CFC is able to seek international financing at attractive rates to improve transmission infrastructure and promote the boom.

"Some firms take advantage of government tax breaks to build the farms themselves and others simply buy the energy from wind plants already being built, mainly by Spanish developers.

"Under the government's scheme, companies get credit for feeding the national grid with extra electricity they don't use, leading to savings up to 10 percent on their electricity bills.

"Investors can also make good money from wind projects in emerging markets such as Mexico, said Rupesh Madlani, head of clean technology research at Barclays Capital."

 View the entire Reuters story at: Mexican wind energy boom plays out on gusty shores

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